- 13 Nov 2024
- ICICI Securities
TATA CHEMICALS TO INVEST £60 MILLION FOR NEW MANUFACTURING IN UK AND CEASE THE PRODUCTION AT LOSTOCK PLANT UK
News: Tata chemicals plans to invest a £60 million (~₹ 655 crore) to build a 1,80,000 tons per annum capacity pharmaceutical grade sodium bicarbonate plant in Northwich, United Kingdom. This new plant will triple Tata chemicals production capacity of pharmaceutical grade sodium bicarbonate in UK.The construction is expected to begin in 2025 and get completed by 2027. Also company plans to cease the production at Lostock plant UK for restructuring purposes by end of Jan 25.The lostock plant turnover is Rs 1200 crore(~ 8% of the turnover of the company).
Views: This Pharma-grade sodium bicarbonate plant would serve as a good non-commoditised product with better margin profile. The UK business is a drag on overall EBITDA (with a margin profile of just 5%) with persistent pressure in Soda Ash prices as well as existing sodium bicarbonate (current sales 48000 tones). With this investment and by cessation of the business at the loss-making Lostock plant, the company plans to improve the UK business profitability.
Impact: Positive